TMI Blog1975 (5) TMI 24X X X X Extracts X X X X X X X X Extracts X X X X ..... for these two years on 30th March, 1970 and 11th Sept., 1970 respectively. For the delay in filing the returns the ITO initiated penalty proceedings under s. 271(1)(a) of the Act. The assessee filed a detailed explanation dt. 23rd Dec., 1972. The sum and substance of the explanation was that the assessee had an accountant, who was with them for a good number of years and he fell ill towards the end of 1961. He remained on leave for about 5 months and died in 1962. After his death the firm found Shri Mathur, who had been working in some bank. During this period the partners developed differences between them so much so that whenever they met in the business premises they exchanged hot words. They were not on speaking terms and the business ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... return could not be filed in time is of considerable force. Besides, the appellant has also proved that the accounts of the appellant also could not be ready owning to the death of the old accountant and the appointment of the new accountant. This fact coupled with the fact that the Partners were not taking interest in the business, lands considerable force to the assessee's arguments that the accounts of the appellant could not be completed due to unavoidable circumstances and as such the delay in the filing of the return was on account of sufficient cause. I will, therefore, hold that the appellant was prevented by the sufficient cause from filing the return of income in time. The fact that no extension application was filed does not affe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ook time to dig up the old records, pick up the threads and post the entries therein. It was pointed out that he took time for bringing the accounts upto date for 1964-65 and thereafter it took more time to bring the accounts in proper shape as the partners were not even on speaking terms. It was also pointed out that the income of the firm went down progressively during the years under appeal. The matter was taken to the Court and the books were filed there. Where they remained till February, 1972. In the circumstances it was urged that there was no basis for the ITO to come to a finding that the assessee failed to file the returns without any reasonable cause within the stipulated time. Reliance was placed on the following decisions. ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erious disputes arose between the partners so much so that they were not on speaking terms. Those disputes were ultimately taken to the Court in March, 1967 and the account books were filed there. The books remained there for a considerable time. On these facts and circumstances it is clear to us that there was a reasonable cause for not filing the returns. The argument urged on behalf of the Department that the illness of the accountant was more relevant for the asst. yr. 1964-65 is rather inconsequential as the after effect of this illness continued to have their impact on the future maintenance of the accounts. The new accountant had to look after the day to day accounts. He had natural difficulty as the partners were having serious disp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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